Tough Times at the Accountability Household

We’re still able to make it financially, but extra payments to our credit card debt is going to have to hold on a bit.

We were going along like gangbusters last year paying off debt at a pretty nice clip.  We started 2010 owing $23,587.53 in credit card debt.  On December 31st, 2010, the balance was $15,541.76.  We managed to pay off over $8000 in credit card debt last year, I am really impressed with our accomplishment.  I had hoped to see great strides toward our credit card debt this year, but at the moment it looks bleak.  Unfortunately, as I’ve mentioned a couple of times in the last few weeks we are having a bit of a money crunch.  I know this has been one of the factors in creating some anxiety for me resulting in my post last Friday Prices Are Rising, I’m Starting to Get a Little Freaked Out.

Most months I am able to take $1000 owner’s draw from Mr. A’s business accounts, but business was slow last fall and he had to use his credit card to buy materials and gasoline.  Instead of taking the hit in our personal finances, we decided to take our usual draw for a couple of months, hoping business would pick up.  Bad move. What we should have done was to take the hit personally and pay the money coming in toward the business credit card debt.  As a result, Mr. A hit the credit limit on his credit card and has been struggling ever since to keep enough money coming in to pay for materials and gasoline.  We are in a position where every dollar Mr. A makes has to go right back into his business, so that leaves us struggling financially.

I do still have my savings for upcoming bills, like the auto insurance is due at the end of this month.  When we found much better auto insurance rates six months ago I continued to save back the higher monthly amount so I have an extra $300 saved. Yay me!  But I can’t put that toward our credit card debt because now I need it to make ends meet.  And it helped immensely that Mr. A was able to get his tires replaced at no charge as I was able to transfer the money I’d been saving for tires back into our checking account for bills at the beginning of February. It was also good that we were able to get $500 in cash back rewards toward the business credit card.  When I applied for those rewards I was informed it would take 8-10 weeks to transact, but in reality it took less than two weeks.

I have thought before about the fact that business finance charges are a business expense… so it is less damaging financially to run a balance on the business credit card, because the finance charges can be considered a business expense! But that’s not how we like to run the business, so we are making a point to pay down the current charges with business income as soon as we possibly can, and let the personal credit card debt accrue more finance charges.

Until Mr. A can get his business credit card paid down so that we can again take a draw from the company we are going to have to cut back on any extraneous spending, which we don’t do much of to begin with, and make payments to the credit cards that are closer to the minimum. I will still attempt to pay $10 or $20 more than the minimum. I am also beginning to make a bit more money from blogging, so I am using as much of that income as I can to make snowball payments toward our debt.  Also, in the month of January, readers from this blog started their Amazon shopping using the search box on the left sidebar and I made $28.25 in affiliate links, which will be paid toward our debt as soon as Amazon deposits the amount in my new business checking account. Thank you again to anyone kind enough to use my link to shop through.

So how is 2011 treating you financially so far?

OUT OF DEBT AGAIN is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to AMAZON.COM. OUT OF DEBT AGAIN is an affiliate for several companies and may be compensated through advertising and marketing channels. This post may contain affiliate links.

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18 comments to Tough Times at the Accountability Household

  • Melissa

    I wish you the best with your struggles in the lean months. You’ve made such amazing progress thus far with your debt payoff that these few months won’t be a deal breaker for you. Instead, it is a time to see your efforts to plan for expenses really pay off and reaffirm your mission to be debt free.

    [Reply]

    Mrs. Accountability Reply:

    @Melissa, thank you very much. I appreciate your kind words of support. I really look forward to when we can start hitting the debt and get out of debt again! :-)

    [Reply]

  • Hopefully you’ll be able to continue to earn even more money from the blog, and Mr. A will be able to get the business card paid down quickly.

    [Reply]

    Mrs. Accountability Reply:

    @Jackie, thank you, these are my hopes as well!

    [Reply]

  • $8000 of debt in one year is AMAZING! Have you thought about monetizing your blog a little bit better? or more aggressively?

    [Reply]

    Mrs. Accountability Reply:

    @Evan, thanks. When I see that others have paid down much more debt in a year I don’t think what we’ve done is all that impressive. I guess when you consider we eliminated a good percentage of our debt. I mean if we’d started out with $150,000 in debt $8000 wouldn’t be much at all, but well. You know what I mean. I’m not a very aggressive person so I don’t know how much more aggressive I can become in monetizing my blog… I’m doing my best at this point.

    [Reply]

  • I see one way that you can make more money on the blog. Put the advertisement that appears on the bottom of each post in the middle or at the top. You get a better click through rate that way.

    I would also consider changing your theme a bit to attract even more advertisers. The buttons from other blogs are taking up valuable real estate.

    Finally, have you thought about making some money through your writing on other networks? I’ve been exploring it myself.

    good luck to you.

    [Reply]

    Mrs. Accountability Reply:

    @Sandy @ yesiamcheap, I have actually had my Google Adsense at the top of each post and my revenue wasn’t much different than it is now. BlogHer changed their “rules” and no longer allows Google text ads within the post area. The left sidebar Google Ad is still within the “rules” and it cannot be image or rich text. I’m not making a ton of money from BlogHer, but I have some opportunities for exposure that I think are good. I don’t have time to write for anyone else, I do work a “regular” job and also keep my husband’s books for his two businesses. I probably work about 60-70 hours a week as it is. Thank you for all your suggestions, I do appreciate your taking the time to offer them. I wish I had more time for blogging, I truly do but it doesn’t seem to be in the cards for me currently.

    [Reply]

  • Just keep at it. Change and life in general does not move in a straight line. Much more like a zig zag!! Over time, you will get there.

    [Reply]

    Mrs. Accountability Reply:

    @Barb Friedberg, you’re so right. I just hate seeing those finance charges. They just make me sick. Here’s hoping to better income soon!

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  • Hi Mrs. A – anyone canny enough to retire $8000 worth of credit card debt in one year can make through some lean months. Here’s to wishing you and Mr. A all the best.

    [Reply]

    Mrs. Accountability Reply:

    @101 Centavos, thank you very much for the kind words. I have heard of other bloggers doing much better than us, but I guess I need to just give us a pat on the back and be happy we were able to do this well last year. Here’s hoping things look up soon. Thanks again.

    [Reply]

  • Hello!

    Thank you for sharing your money struggles with us. We all go through lean times and glory times…I hope your glory times return soon!

    While reading your post, I was hoping that you won’t owe taxes this year (or that you set aside tax money for your husband’s business)? That would be helpful. You’ve done a great job at setting aside money for your other large expenses–so congrats to you!

    [Reply]

    Mrs. Accountability Reply:

    @Amanda L Grossman, hi, yes we made estimated payments during 2010. I did a very quick look at our taxes and it looks like we paid enough in that we shouldn’t be liable for more. Thank goodness, that is a relief.

    [Reply]

  • Paying off $8,000 in debt is a good thing, so well done! Good thinking on the business expense as well.

    How much incremental income a month do you need to give you that breathing room you think?

    [Reply]

    Mrs. Accountability Reply:

    @Financial Samurai, thanks Sam. Well, $1000 a month would be great and would provide some nice breathing room. Of course more is always better. :-)

    [Reply]

  • [...] Mrs. Accountability @ Out of Debt Again will have some tough times ahead. [...]

  • [...] ain’t over yet at the Accountability household. Mrs. Accountability reflects on the present spate of hard times at Out of Debt [...]

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